Apple has just announced that they would be introducing the App Store Small Business Program, which developers can qualify for if they have earned up to $1 million in proceeds during the previous calendar year. It will provide developers with a reduced commission of 15 percent on paid apps and in-app purchases.
“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love.
The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives.”
- Apple CEO Tim Cook
The App Store Small Business Program will launch on January 1, 2021, and Apple notes that such an endeavor "comes at an important time as small and independent developers continue working to innovate and thrive during a period of unprecedented global economic challenge." The program is meant by Apple to help small developers and aspiring entrepreneurs, which is nice to see.
What Is The Apple Small Business Initiative?
I'm glad you asked! Here are the facts:
- Developers who made up to $1 million in 2020 for all their apps, as well as developers that are new to the App Store, can qualify for the program and reduced commission.
- If you're a developer that surpasses the $1 million threshold, the standard commission rate (30%) will apply for the rest of the year.
- If a developer's business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.
This new initiative was announced as Epic Games announced another lawsuit, this time with Apple Australia. This is interesting timing, because Apple is making this change while Epic Games has previously argued that 30% is too high for developers trying to use their App Store. Is Apple's announcement related to the Epic Games lawsuit? Probably, but it's definitely not mentioned in Apple's announcement, which focuses on smaller developers and entrepreneurs rather than massive corporations like Epic Games, but may injure Epic Games' arguments of unfair rates.
If you would like to read the full announcement, be sure to check it out here.
What do you think of this news? Are you a small developer that will be impacted by this news? Do you think that this is a well-overdue move? Let us know in the comments!